Is It Worth Keeping Your American Express Card After the 1st Year?

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Readers often ask when to cancel or close a credit card. In general, I evaluate whether to keep or cancel a card after 9 to 10 months. That’s because most cards waive the annual fee for the 1st year, so there’s no point canceling the card immediately.

And banks don’t like when you close a card right after getting the sign-up bonus! So they might hesitate to approve you for more of their cards in the future.

So Many American Express Cards – Are Any of These in Your Wallet?

Many cards provide a benefit for keeping the card after the 1st year and for paying the 2nd year annual fee. But what’s a good benefit for me, may not be good for you. So let’s review the benefits for keeping certain American Express cards.

That way you can decide whether to keep or cancel your American Express card when the annual fee is due!

Here’s how I evaluate the different credit cards and charge cards from American Express.

Benefits for Keeping Card: Category bonuses – if you spend a lot on airfare purchased from airlines and at US gas stations, restaurants, and supermarkets. Airline fee credit makes up for part of annual fee.

Drawbacks of Keeping Card: High annual fee.

Worth It or Not: This card is NOT worth keeping unless you spend a lot in bonus spending categories. This used to be a good card for Big Spenders, because you’d get 15,000 bonus points after spending $30,000 or more in a calendar year. But American Express has discontinued that perk.

Reason for Getting Card: Sign-up bonus. There aren’t many other ways to earn Starwood points, which are valuable because you’ll get a 5,000 mile bonus when transferring to airline miles (20,000 points becomes 25,000 miles).

If you transfer Starwood points to airlines, the 5,000 mile bonus pays for the $65 annual fee because you’re only paying 1.3 cents per point. If you bought 5,000 Starwood points outright, you would pay $175 or 3.5 cents per point. And there’s no limit on how many Starwood points you can transfer to airlines, although you can only transfer 79,999 points in a 24-hour period.

If you don’t fly, it might be worth paying the annual fee to earn points toward inexpensive hotel stays using the Cash + Points benefit.

Note: You do NOT have to be a cardholder to get the 5,000 mile bonus when transferring 20,000 points to airlines or to use Cash + Points. But it’s much harder to earn Starwood points if you don’t have the card!

Like the American Express Mercedes-Benz Platinum card, the Platinum Card from American Express (personal) and (business) earns American Express Membership Rewards points which can be transferred to airline partners and redeemed for flights.

The Gold Delta SkyMiles (personal) and (business) card isn’t a fancy card with a lot of bells and whistles. But it could be good for someone like me who doesn’t earn elite status from flying because I mostly use miles.

The Gold Delta SkyMiles Card Let Us Check This Bag of Care Packages for Free!

Reason for Getting Card: Sign-up bonus and $50 statement credit

Annual Fee: $95 (waived for the 1st year)

Benefits for Keeping Card: First checked bag for free and Priority Boarding

Drawbacks of Keeping Card: The annual fee.

Worth It or Not: It depends. If you fly frequently and check bags, the free checked bag could cover the cost of the $95 annual fee.

If you don’t fly on Delta often, but want to earn Delta miles, the Starwood Preferred Guest card would be a better card to get because of the 5,000 bonus miles when you transfer 20,000 Starwood points to airlines.

Benefits for Keeping Card: First checked bag for free, Companion Certificate, and 10,000 elite qualifying miles after spending $25,000 plus an additional 10,000 miles after spending $50,000 in a calendar year

Drawbacks of Keeping Card: Annual fee of $195

Worth It or Not: It depends. Yes, if you are a Big Spender. If you spend $25,000 within 1 calendar year you get 10,000 elite qualifying miles plus another 10,000 miles if you spend $50,000.

10,000 to 20,000 elite qualifying miles won’t get you Delta elite status, but it could help you reach elite status if you’ve already earned elite qualifying miles. Delta elite status gets you perks such as free upgrades for you and a companion, seats with more leg room, and a free checked bag.

If you don’t spend a lot of money on the card, it may not be worth paying the $195 annual fee.

Benefits for Keeping Card: Earn 15,000 redeemable miles and 15,000 elite qualifying miles after spending $30,000 in a calendar year. Earn 30,000 redeemable miles plus 30,000 elite qualifying miles after spending $60,000 in a calendar year; up to 30,000 elite qualifying miles can be can be transferred to anyone’s Skymiles account

9. American Express Simply Cash

Because miles and points can’t pay for everything, like sightseeing and tours, the American Express Simply Cash card offers cash back on all purchases.

You Can Earn 5% Cash Back at Office Supply Stores With the American Express Simply Cash Card

Reason for Getting Card: Sign-up bonus and you can get bonus cash back on select purchases:

5% Cash back at US office supply stores and US wireless services

3% Cash back on your choice of airfare, hotel, car rental, US gas stations, US restaurants, US advertising, or US shipping

1% Cash back on everything else

Annual Fee:NO annual fee

Benefits for Keeping Card:Cash back on all purchases with up to 5% on select bonus categories

Drawbacks of Keeping Card:2.7% foreign transaction fee so not a card to use outside the US

Worth It or Not:Yes, if you’re looking for a fee-free card to keep for a long time. But there are other cash back cards withoutan annual fee, like the Chase Freedom or Citi Double Cash.

Some folks who don’t have or want a Chase Ink Plus or Chase Ink Bold (no longer available) card might like the American Express Simply Cash because you get 5% cash back on US wireless services and 3% cash back in 1 of 7 categories you choose.

Think about your travel goals, then decide which cards are best for you!

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13 responses to “Is It Worth Keeping Your American Express Card After the 1st Year?”

I once tried to apply for the Gold card, but when I clicked on it, I got a warning that I have been identified as an existing Amex card holder. So, I would not be eligible for the sign up bonus. I have never had the card before. I only have the Amex blue and the Amex hilton. Folks will just need to be careful and read all text on the Amex card page before applying.

I once tried to apply for the Gold card, but when I clicked on it, I got a warning that I have been identified as an existing Amex card holder. So, I would not be eligible for the sign up bonus. I have never had the card before. I only have the Amex blue and the Amex hilton. Folks will just need to be careful and read all text on the Amex card page before applying.

When you’re considering renewing an AMEX card with a modest fee, such as SPG AMEX (business or personal) or Hilton Hhonors Surpass, a big part of the equation should be the savings from AMEX offers. In the past year, I have scored rebates such as $50 on a Hilton stay, $20 (on three different cards) at my local supermarket, as well as rebates from Lowe’s, Staples, Macy’s, Lord and Taylor and more. Currently, there is a $20 off $20 offer at samsclub.com. And don’t forget Small Business Saturday deals. If you play your AMEX cards right, you can make back your annual fee and much more.

Good points, PSL.. And since you can’t get the enrollment bonus again (unless they change terms some day in the future), there’s no argument to cancel in order to try again later. Still, some of those cards have very stiff fees indeed. I’ve found the Ameriprise version of the platinum card to be churnable. It has no enrollment bonus, but does have all the other perks, and the annual fee is waived the first year. So I get it for the two $200 rebates, the lounge access, and all the other bells and whistles, then cancel after a year.

I just wish AMEX would get rid of those ripoff “foreign usage fees”, which make most of their cards unusable for me during much of the year. They must still think they get their money’s worth fleecing those customers inattentive enough to use their products overseas in order to offset the losses from those like me who put a lot of spend while traveling on competitor cards that don’t have this bogus charge. Hello Chase Sapphire Preferred.

The AMEX SPG card neither gives the 5k point discount, nor the ability to book Cash + Points. These are benefits of SPG points in and of themselves. How can they be the reasons to keep the card?

Comparing to a 2% cash back card and starting from 0 SPG points, you have to spend $20k on the SPG card to get your $65 annual fee back (if used for flights and getting 2 cents/point value). OR spend $6500 and make sure to get 3 cents/point redemption value from those points. I know many regard hotel stays much higher, but it’s hard for me to justify high point values because I’m more of a priceline/hostel/couchsurfing kind of guy.

Thanks for this article. It’s the first time I was forced to do this analysis and realize what type of spending I should be putting on this card.

Thank you for this post, it was very informative. I was suffering what you mean exactly when you said the benefits for having the SPG card are: 2 stay credits and 5 elite qualifying night credits every calendar year? What does that mean exactly? My husband has had his card for over a year and we’re planning on using most of his remaining points for a trip to Argentina this fall. Also, if we cancel the card do we keep the points or do we have to use them before we cancel the card? Thank you!

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